In February, Abbott completed the sale of its developed markets branded generics pharmaceuticals business to Mylan. The Established Pharmaceuticals business is now focused entirely on emerging markets.

Abbott launched several new products beginning this year, including FreeStyle® Libre Pro Flash Glucose Monitoring System for professional use in India; new slim-designed blood glucose meter FreeStyle Precision Neo in the U.S.; TECNIS® Multifocal Low Add and TECNIS Preloaded intraocular lenses (IOLs) in the U.S.; a new drug-eluting stent system XIENCE AlpineTM in Japan; and Ensure® for retail adult nutrition in China.

In March, Abbott opened a new state-of-the-art nutrition pilot plant in Singapore, which also will serve as an R&D hub in Asia and allow Abbott to more rapidly incorporate local consumer preferences.

"We're off to a good start this year, with particularly strong performance in our branded generics, international nutrition and global diagnostics businesses," said Miles D. White, chairman and chief executive officer, Abbott.

FIRST-QUARTER BUSINESS OVERVIEW

Note: Prior year financial results have been adjusted to exclude the sales from Abbott's developed markets branded generics pharmaceuticals and animal health businesses that were sold to Mylan and Zoetis, respectively, in the first quarter 2015. Therefore, sales and growth rates shown in the following chart represent continuing operations.

Following are sales by business segment and commentary for the first quarter:

Total Company
($ in millions)

% Change vs. 1Q14

Sales 1Q15

Int'l

Total

U.S.

Int'l

Total

U.S.

Operational

Reported

Operational

Reported

Total *

1,502

3,395

4,897

1.9

13.6

3.5

10.0

3.0

Nutrition

685

984

1,669

(0.6)

11.4

4.5

6.3

2.3

Diagnostics

327

766

1,093

5.5

6.1

(5.1)

6.0

(2.1)

Established Pharmaceuticals

--

897

897

n/a

43.0

31.8

43.0

31.8

Medical Devices

485

741

1,226

3.6

(0.4)

(12.2)

1.0

(6.6)

Note: Operational growth reflects percentage change over the prior year excluding the impact of exchange rates.

* Total Abbott Sales from continuing operations include Other Sales of $12 million.

n/a = Not Applicable.

First-quarter 2015 worldwide sales of $4.9 billion increased 10.0 percent on an operational basis, including the impact of 2014 acquisitions, driven by strong performance in Established Pharmaceuticals, Nutrition and Diagnostics. Sales increased 3.0 percent on a reported basis, including an unfavorable 7.0 percent effect of foreign exchange.

International sales increased 13.6 percent on an operational basis and 3.5 percent on a reported basis in the first quarter.

Emerging market sales increased 20.6 percent on an operational basis and 13.0 percent on a reported basis in the first quarter, including the impact of 2014 acquisitions.

Nutrition
($ in millions)

% Change vs. 1Q14

Sales 1Q15

Int'l

Total

U.S.

Int'l

Total

U.S.

Operational

Reported

Operational

Reported

Total

685

984

1,669

(0.6)

11.4

4.5

6.3

2.3

Pediatric

385

577

962

4.5

11.7

6.0

8.8

5.4

Adult

300

407

707

(6.5)

10.8

2.4

3.1

(1.6)

Worldwide Nutrition sales increased 6.3 percent in the first quarter on an operational basis and 2.3 percent on a reported basis, including an unfavorable 4.0 percent effect of foreign exchange. Abbott Nutrition continues to increase its local presence in key markets. In addition to the three nutrition manufacturing plants Abbott opened in 2014 in China, India and the U.S., Abbott opened a new nutrition pilot plant in Singapore during the first quarter of 2015 to serve as a second global R&D hub. This state-of-the-art facility will allow Abbott to more rapidly pair nutrition science innovation with local consumer preferences.

Worldwide Pediatric Nutrition sales increased 8.8 percent on an operational basis and 5.4 percent on a reported basis in the quarter, including an unfavorable 3.4 percent effect of foreign exchange. Sales growth in the quarter was led by strong international performance, including double-digit growth in China and Latin America on an operational basis.

Worldwide Adult Nutrition sales increased 3.1 percent on an operational basis and decreased 1.6 percent on a reported basis in the quarter, including an unfavorable 4.7 percent effect of foreign exchange. Sales growth was led by international performance, including strong double-digit growth in Latin America on an operational basis. Abbott recently launched its Ensure brand in China in the retail segment, which represents a significant growth opportunity. U.S. Adult Nutrition sales were impacted by competitive and market dynamics. Abbott expects an improvement in U.S. Adult Nutrition sales growth over the rest of the year as it launches new products.

Diagnostics
($ in millions)

% Change vs. 1Q14

Sales 1Q15

Int'l

Total

U.S.

Int'l

Total

U.S.

Operational

Reported

Operational

Reported

Total

327

766

1,093

5.5

6.1

(5.1)

6.0

(2.1)

Core Laboratory

185

681

866

1.8

5.4

(5.8)

4.7

(4.3)

Molecular

48

63

111

3.4

10.2

(1.8)

7.4

0.4

Point of Care

94

22

116

14.7

18.3

11.3

15.5

14.1

Worldwide Diagnostics sales increased 6.0 percent in the first quarter on an operational basis and decreased 2.1 percent on a reported basis, including an unfavorable 8.1 percent effect of foreign exchange. This business continues to deliver durable growth across emerging and developed markets, while also investing in the development of several next-generation diagnostic platforms across all of its business units.

Core Laboratory Diagnostics sales increased 4.7 percent in the quarter on an operational basis and decreased 4.3 percent on a reported basis, including an unfavorable 9.0 percent effect of foreign exchange. Sales growth in the quarter was driven by double-digit growth in emerging markets and strong global growth in the Core Laboratory segment from continued market-share gains driven by the success of Abbott's customer-focused solutions that help manage large testing volumes and increase operational efficiencies. U.S. sales growth was impacted by a comparison to first quarter 2014 when sales increased double digits driven by higher blood screening sales.

Molecular Diagnostics sales increased 7.4 percent in the quarter on an operational basis driven by double-digit operational growth in the infectious disease business, which represents approximately 55 percent of the Molecular Diagnostics sales. Sales increased 0.4 percent on a reported basis, including an unfavorable 7.0 percent effect of foreign exchange.

Point of Care Diagnostics sales increased 15.5 percent in the quarter on an operational basis, as this business continues to build and expand its presence in targeted developed and emerging markets. Sales increased 14.1 percent on a reported basis, including an unfavorable 1.4 percent effect of foreign exchange.

Established Pharmaceuticals
($ in millions)

Note: Prior year financial results have been adjusted to exclude the sales from the developed markets branded generics pharmaceuticals business, which was sold to Mylan on Feb. 27, 2015. Therefore, sales and growth rates shown in the following chart represent continuing operations.

% Change vs. 1Q14

Sales 1Q15

Int'l

Total

U.S.

Int'l

Total

U.S.

Operational

Reported

Operational

Reported

Total

--

897

897

n/a

43.0

31.8

43.0

31.8

Key Emerging Markets

--

653

653

n/a

44.8

31.8

44.8

31.8

Other

--

244

244

n/a

38.0

31.6

38.0

31.6

Established Pharmaceuticals sales increased 43.0 percent in the first quarter on an operational basis and 31.8 percent on a reported basis, including an unfavorable 11.2 percent effect of foreign exchange. During the quarter, Abbott completed the sale of its developed markets branded generics pharmaceuticals business to Mylan. The Established Pharmaceuticals business is now focused entirely on emerging markets.

Key Emerging Markets include India, Russia, China, Brazil and Colombia, along with several additional markets that represent the most attractive long-term growth opportunities for Abbott's branded generics product portfolio. Sales in these geographies increased 44.8 percent on an operational basis and 31.8 percent on a reported basis, including an unfavorable 13.0 percent effect of foreign exchange. Excluding the impact of recent acquisitions, sales in Key Emerging Markets increased low double digits on an operational basis.

Worldwide Medical Devices sales increased 1.0 percent in the first quarter on an operational basis and decreased 6.6 percent on a reported basis, including an unfavorable 7.6 percent effect of foreign exchange.

Worldwide sales of Vascular products increased 2.1 percent in the quarter on an operational basis and decreased 5.4 percent on a reported basis, including an unfavorable 7.5 percent effect of foreign exchange. Sales of Endovascular products increased high single digits on an operational basis and sales of Abbott's MitraClip® structural heart product for the treatment of mitral regurgitation increased double digits globally on an operational basis in the quarter. In March at the American College of Cardiology meeting, Abbott presented late-breaking data from the initial commercial use of MitraClip in the U.S. that demonstrated a clinically meaningful reduction in the severity of mitral regurgitation and improvement in the overall health of patients who are not good candidates for surgery. In Japan, Abbott recently launched its new drug-eluting stent system XIENCE Alpine, which is designed for peak performance in complex interventions.

Worldwide Diabetes Care sales increased 2.8 percent in the quarter on an operational basis and decreased 5.6 percent on a reported basis, including an unfavorable 8.4 percent effect of foreign exchange. Abbott continues the expansion of its revolutionary new glucose sensing technology FreeStyle Libre Flash Glucose Monitoring System into new geographies and recently received approval in India for its FreeStyle Libre Pro Flash Glucose Monitoring System. The FreeStyle Libre Pro is a first-of-its-kind device for professional use that incorporates the same sensor-based technology as FreeStyle Libre and has the potential to change how healthcare providers monitor patients, particularly in geographies where self-monitoring of blood glucose is not a common practice. In the U.S., Abbott launched FreeStyle Precision Neo, a new slim-designed blood glucose meter, available over-the-counter at major U.S. retailers, offering people with diabetes the opportunity to easily access a well-known brand.

Worldwide Medical Optics sales decreased 3.4 percent in the quarter on an operational basis and 10.5 percent on a reported basis, including an unfavorable 7.1 percent effect of foreign exchange. Sales growth in the quarter was impacted by competitive and market dynamics in the cataract and refractive businesses. Abbott expects improved sales growth over the rest of the year as it launches new products, including the TECNIS Multifocal Low Add and TECNIS Preloaded IOLs recently launched in the U.S.

Abbott continues to forecast net specified items related to continuing operations for the full year 2015 of approximately $0.77 per share. Specified items include intangible amortization expense, charges associated with cost reduction initiatives, and expenses related to acquisitions.

Including net specified items, projected earnings per share from continuing operations under U.S. Generally Accepted Accounting Principles (GAAP) would be $1.33 to $1.43 for the full year 2015.

ABBOTT DECLARES 365TH CONSECUTIVE QUARTERLY DIVIDEND

On Feb. 20, 2015, the board of directors of Abbott declared the company's quarterly dividend of $0.24 per share. Abbott's cash dividend is payable on May 15, 2015, to shareholders of record at the close of business on April 15, 2015.

Abbott is a member of the S&P 500 Dividend Aristocrats Index, which tracks companies that have annually increased their dividend for 25 consecutive years.

About Abbott:
Abbott is a global healthcare company devoted to improving life through the development of products and technologies that span the breadth of healthcare. With a portfolio of leading, science-based offerings in diagnostics, medical devices, nutritionals and branded generic pharmaceuticals, Abbott serves people in more than 150 countries and employs approximately 73,000 people.

Visit Abbott at www.abbott.com and connect with us on Twitter at @AbbottNews.

Abbott will webcast its live first-quarter earnings conference call through its Investor Relations website at www.abbottinvestor.com at 8 a.m. Central time today. An archived edition of the call will be available after 11 a.m. Central time.

Some statements in this news release may be forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Abbott cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Economic, competitive, governmental, technological and other factors that may affect Abbott's operations are discussed in Item 1A, "Risk Factors,'' to our Annual Report on Securities and Exchange Commission Form 10-K for the year ended Dec. 31, 2014, and are incorporated by reference. Abbott undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments, except as required by law.

Abbott Laboratories and Subsidiaries

Consolidated Statement of Earnings

First Quarter Ended March 31, 2015 and 2014

(in millions, except per share data)

(unaudited)

1Q15

1Q14

% Change

Net Sales

$4,897

$4,755

3.0

Cost of products sold, excluding amortization expense

2,081

2,274

(8.5)

Amortization of intangible assets

156

127

23.1

Research and development

313

369

(15.0)

Selling, general, and administrative

1,737

1,620

7.2

Total Operating Cost and Expenses

4,287

4,390

(2.4)

Operating earnings

610

365

67.3

Interest expense, net

16

20

(21.0)

Net foreign exchange (gain) loss

(54)

1

n/m

Other (income) expense, net

(5)

3

n/m

Earnings from Continuing Operations before taxes

653

341

91.3

Taxes on Earnings from Continuing Operations

124

117

5.9

Earnings from Continuing Operations

529

224

135.9

Earnings from Discontinued Operations, net of taxes

26

151

(82.6)

Gain on Sale of Discontinued Operations, net of taxes

1,737

--

n/m

Net Earnings from Discontinued Operations, net of taxes

1,763

151

n/m

1)

Net Earnings

$2,292

$375

n/m

Net Earnings from Continuing Operations, excluding

Specified Items, as described below

$719

$535

34.3

2)

Diluted Earnings per Common Share from:

Continuing Operations

$0.35

$0.14

150.0

Discontinued Operations

1.16

0.10

n/m

1)

Total

$1.51

$0.24

n/m

Diluted Earnings per Common Share from Continuing

Operations, excluding Specified Items, as described below

$0.47

$0.34

38.2

2)

Average Number of Common Shares Outstanding

Plus Dilutive Common Stock Options

1,516

1,548

NOTES:

See tables below for an explanation of certain non-GAAP financial information.

n/m = Percent change is not meaningful.

See footnotes below.

1)

2015 Earnings and Diluted Earnings per Common Share from Discontinued Operations reflect the after-tax gain of $1.737 billion on the sale of the developed markets branded generics pharmaceuticals and animal health businesses to Mylan on Feb. 27, 2015 and Zoetis on Feb. 10, 2015, respectively; the first-quarter financial results from these businesses up to the date of sale; and a favorable adjustment to tax expense as a result of the resolution of various tax positions from previous years related to AbbVie operations.

2014 Earnings and Diluted Earnings per Common Share from Discontinued Operations reflect financial results from the developed markets branded generics pharmaceuticals and animal health businesses, and favorable adjustments to tax expense as a result of the resolution of various tax positions from previous years related to AbbVie operations and the developed markets branded generics pharmaceuticals business.

Specified items reflect intangible amortization expense of $127 million and other expenses, primarily associated with cost reduction initiatives of $192 million, as well as tax expense of $52 million associated with a one-time repatriation of 2014 ex-U.S. earnings.

RECONCILIATION OF TAX RATE FOR CONTINUING OPERATIONS

A reconciliation of the first-quarter tax rates for continuing operations for 2015 and 2014 is shown below:

1Q15

($ in millions)

Pre-Tax
Income

Taxes on
Earnings

Tax
Rate

As reported (GAAP)

$653

$124

19.0%

Specified items

234

44

Excluding specified items

$887

$168

19.0%

1Q14

($ in millions)

Pre-Tax
Income

Taxes on
Earnings

Tax
Rate

As reported (GAAP)

$341

$117

34.3%

1)

Specified items

319

8

Excluding specified items

$660

$125

19.0%

1)

Reported tax rate on a GAAP basis includes the impact of tax expense of $52 million associated with a one-time repatriation of 2014 ex-U.S. earnings.

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